Shed the 'tariff king' crown

S PRESIDENT DONALD Trump has given India the moniker of "tariff king". Is this mere rhetoric or reality? We examine here the tariff structures of G20 countries that account for roughly 85% of global GDP, 75% of global trade, and two-thirds of the population.

- ASHOK GULATI TANAY SUNTWAL Respectively distinguished professor and research assistant, ICRIER

We look specifically at simple averages, and trade weighted tariffs (TWTs) on all goods, but also separately for agriculture and non-agriculture goods.

The numbers tell an interesting story. For all goods, Türkiye has the highest simple average tariff (SAT) (17.3%), followed by India (16.2%). But if one takes the TWT of all goods, India is undoubtedly the tariff king with 12%. The US, by contrast, stands at 3.3% for simple average and 2.2% for TWT on all goods (see graphic). It is thus no wonder that it points to India and many other countries, including allies, for having high tariff walls.

Lower tariffs are a sign of the inherent competitive strength of the economy. So, if India wants to be a superpower, it must develop its trade competitiveness and lower tariffs well below 10% for all goods. But it cannot be done overnight, although there is ample scope. For that, we look at tariffs on agriculture and non-agriculture goods separately.

In agriculture, there is no doubt that India is the tariff king with a TWT of 64.3%, although South Korea tops the list for SAT with 57%, compared to India's 36.7%. Meanwhile, the US has a TWT of just 4.2%.

In case of non-agriculture products, India may not be the king, but is certainly a step behind. Argentina leads with TWT at 11.6%, followed by India at 9.2%.